Most people have some sort of insurance coverage, usually in the form of health, property, auto and even renter’s insurance. Yet, they skip one of the most important insurance policies they could ever take out –the life insurance coverage.
Those who take life insurance very seriously are those in high-risk occupations. Others don’t because they don’t see the need for it. This is a very costly mistake and one that can adversely affect your loved ones if you were to experience sudden death.
The fact is that most people don’t like to think of death particularly when they are young –hence the reason most people put off the idea of life insurance till the last possible minute.
Unfortunately, it’s one of the surest life events. Planning for your loved ones when you die is not just about leaving them a will or an inheritance. As a responsible parent, guardian and loved one, you want to make sure that they are well taken care of in the event of your sudden or expected demise.
Life Insurance Basics
There are two basic types of life insurance coverages:
1. Term life insurance
This provides coverage for a stipulated number of years –usually 10-30 years. This means that if you die within that period, your loved ones will get all the benefits. But if you don’t, the policy simply expires and you can collect the benefits or you can renew at substantially higher rates. Most term life insurance coverages can be renewed up till the age of 95. Term life is usually great for younger people looking to get life insurance early.
2. Permanent Life Insurance
This life insurance policy is designed to provide coverage for you throughout your life. There are a few types of permanent life insurance coverages:
Whole Life Insurance. This typically attracts higher fixed premium or payments. The beneficiaries of the insured will often get a predetermined benefit and cash value in the event of their demise.
Universal Life Insurance. This insurance policy also provides lifetime coverage. But unlike Whole Life, the premiums are usually flexible. So you can either pay more or less –within set limits- at any time, as long as you meet the cost of the coverage. This also typically attracts higher premiums than Term Life policies.
Benefits of Life Insurance
Now that you know the types of life insurance, here’s more information on its benefits:
1. Ensures Your Dependents are Provided For
For many people on their dying beds, one of their greatest regrets is not providing for their loved ones after they pass. This is felt even more when their kids are still young. A life insurance policy ensures that your family and loved ones are taken care of up to a point –usually about 10-20 years depending on the policy- after you pass. This will usually be in the form of monthly payments to help support them as well as college funds to guarantee their education.
2. Takes Care of Bills, Debts and Loans
Death is a terrible blow. But it’s often made worse for the deceased’s loved ones if they have to assume the debts, bills and loans left behind. This can often compound their grief.
A good example is a mother of two young kids losing her home because she can’t afford the mortgage anymore. Life insurance benefits can be used for these purposes, thus relieving the burden on your loved ones who are left behind.
3. Pays for Expenses Accrued at the Time of Your Passing
Funerals can be very expensive. But, having a decent life insurance coverage can help offset some of the expenses. This way, your family doesn’t have to pay for the funeral out of pocket.
Need help making a decision on the best life insurance package for you? Get in touch with us at Insurance Land today.